“In its quarterly earnings statement today, Google announced it would for the first time in its history be splitting its stock,” Jolie O’Dell reports for VentureBeat. “‘Today, we announce plans to create a new class of non-voting stock,’ Google CEO Larry Page said Thursday in an investors call.”
“Emphasizing that the non-voting nature of the new class of stock would not have much of an impact on how the company is controlled, the search-giant co-founder continued, ‘This proposal will only have an effect on governance in the very long term… We are honored that so many of you have put your trust in us,'” O’Dell reports. “The statement about trust speaks to the voting rights maintained by Google’s founders, who each get ten votes per share of stock they hold. The arrangement is akin to how Facebook CEO Mark Zuckerberg arranged to maintain control of his company and board following the social network’s highly anticipated IPO.”
O’Dell reports, “By splitting its stock just weeks (in all likelihood) before Facebook’s IPO, Google is sending a message to potential investors: Bet on us. We’re a sure thing. We’ve been around for eight years, and we’re only getting more valuable over time… In today’s two-for-one split, each current shareholder will get an additional non-voting share for each share of Google stock he or she currently holds…Typically in a two-for-one split, the share price is adjusted accordingly so that Google shares, which are currently trading at around $650 each, will see a dip down to half that amount, roughly $325 per share.”
Read more in the full article here.
Related article:
Apple announces two-for-one stock split – February 11, 2005